Update on Health Reform:Key Issues for Kids

Jocelyn Guyer, Joan Alker and Cathy Hope2009 Finish Line Conference

Center for Children and Familieshttp://ccf.georgetown.edu

Say Ahhh! A Children’s Health Policy Blog at http://www.theccfblog.orgJuly 6, 2009

Importance of Health Reform

• Historic opportunity to move towards universal coverage with significant new role for federal government in shaping health policy.

• Infusion of $1 trillion federal money into health coverage.

• New regulatory framework for private insurance.

Importance of Health Reform to Kids

• Coverage for their parents and others who care for them

• Much-needed relief for family budgets

• Improvements to the health care delivery system

• Chance to cover remaining uninsured children and make sure they get the care they need

Schedule for Health Reform

Senate HELP Committee Schedule

• Early June, an initial bill was released.

• Markup is in process.

• Goal is to combine with Senate Finance Committee bill in July.

Senate Finance Committee Schedule

• Issued options papers, but no bill as of yet.

• Initial mark release postponed after $1.6 trillion CBO score.

• New mark will be available at the end of this week???

House Tri-Committee Schedule

• An initial bill released in mid-June. Revised version imminent.

• Markup later this week??

The Remaining (Optimist’s) Schedule

• House and Senate floor action by the end of July.

• Conference in the fall after August recess.

• Health Care Reform bill on President Obama’s desk by October.

Contents of The Bills

Build on What Works

My view is that reform should be guided by a simple principle: we fix what's broken and build on what works.

-President Obama June 11, 2009 Green Bay, WI

Build on What Works; Fix What Doesn’t

• Keep employer-based coverage

• Expand public programs

• Create an “Exchange”

• Create a related subsidy program for remaining uninsured

• “Shared responsibility”o Individual mandateo Employers offer coverage or help finance subsidy programo Government spends more

Overall Structure

Employer-based coverage

Medicaid

The “Exchange”

Uninsured people

Note: Relative size of these circles is unclear

Which Children Will Remain Uninsured?

• Immigrant children

• Children whose parents cannot comply with the mandate for whatever reason

o Red-tape barriers to coverage in Medicaido Affordability issues

Issues for Kids in Health ReformCCF’s Framework for Evaluating Bills

1. Building Affordable Coverage Pathways for All of America’s Children

2. Beyond Insurance – Ensuring Children Get the Care They Need

3. Creating a Family-Friendly, “No Wrong Door” Enrollment and Renewal Process

4. Strengthening Financing for Public Programs

How Do Kids Get Coverage?

Finance HELP House• Medicaid to 133% FPL gross income

• If between 100 and 133% FPL, can go into Exchange •“MOE” on Medicaid until health reform begins

• Few details on CHIP; states may be able to use to provide supplemental coverage to Exchange children up to 275% FPL

• Tax credit to purchase coverage up to 300% FPL

• Assumes Medicaid coverage to 150% FPL

• Subsidies to 400% FPL

• No discussion of CHIP

• Medicaid to 133% FPL net income

• In 2018, Medicaid beneficiaries can go into Exchange under some circumstances (selected childless adults earlier)

• Permanent Medicaid “MOE”

• CHIP expires September 2013; children moved into Exchange

• Subsidies for families up to 400% FPL

What Happens to CHIP?

Finance HELP House• Few details on CHIP

• States may be able to use to provide supplemental coverage to Exchange children up to 275% FPL

• No discussion of CHIP; outside the committee’s jurisdiction

• CHIP expires September 2013; children moved into Exchange

• Children eligible for CHIP on Day 1 of health reform implementation are deemed eligible for Exchange plans

•For purposes of subsidy eligibility determinations, their income is deemed no greater than under CHIP

What kind of coverage will kids get?

The Big Punt

What Kind of Coverage?

Finance HELP House• Plans must cover a broad range of medical benefits, including preventive care and maternity and newborn care

• CHIP may play a role in supplementing Exchange coverage

• Plans must cover a package of essential benefits roughly equivalent in value to a typical employer plan

• Benefits include “pediatric services” as a “general category” of what needs to be covered

• Benefits must include preventive care and screenings recommended in “Bright Futures”

• Plans must cover a package of essential benefits

• Pediatric services are covered, including well-baby and well-child care, oral health, vision and hearing services, equipment, and supplies

How Much Would it Cost to Buy Subsidized Exchange Coverage?

Finance HELP HouseDetails are missing, but we know:

• Premiums end at 300% FPL

• Coverage will be deemed “affordable” if it costs less than 15% of family income

Subsidies would keep premiums at 1% of income for those at 150% of FPL, rising on a sliding-scale basis to 12.5% of income for those at 400% FPL

Subsidies would keep premiums at 1% of income for those below 133% of FPL, rising on a sliding-scale basis to 10% of income for those at 400% FPL

What Kind of Out-of-Pocket Costs Will Children in the Exchange Face?Finance HELP House

Details are missing, but available information suggests:

• Little or no cost-sharing on preventive services

• Subsidies that allow low-income people buy into “higher tier” plans with better cost-sharing protections (e.g., an average group of people would have to pick up 10% of their covered health care costs)

• Minimal cost sharing for preventive services

• Subsidies that allow low-income people buy into “higher tier” plans with better cost-sharing protections (right?)

• Plus, an annual out-of-pocket cap set at $11,900 for families

• No cost sharing for preventive services

• Subsidies designed to provide better cost-sharing to lower-income families (e.g.,, an average population below 133% of the FPL would have to cover 2% of their covered health care costs; one at 400% would have to cover 30% on average)

• Plus, an annual out-of-pocket cap set at $500 for families below 133% of the FPL and increasing on a sliding-scale basis to $10,000 for a family

What Efforts Are Made to Transform the Delivery System for

Children?Finance HELP House

• Quality measures from CHIPRA are extended to Medicaid

• Otherwise, delivery system reforms limited largely to Medicare

• May address Medicaid reimbursement rates

• National strategy to improve the quality of care

• Investments in workforce trainings

• Promotion of preventive care

• Investment in medical homes

Children are included in each of these initiatives.

• 100% federal funding for higher reimbursement rates for primary care in Medicaid

• Medical home demonstrations in Medicaid

How Do You Get Signed Up?

Finance HELP House• Details not yet available • State-based Exchanges will

be responsible for enrolling people in coverage

• Eligibility will be based on adjusted gross income in prior tax year (verified via federal income tax data when possible with special procedures for non-filers)

• State-based exchanges will have some responsibility to facilitate enrollment of people into Medicaid

• National exchange responsible for enrollment

• An annual enrollment period each year; information provided via telephone hotline, web site, etc.

• Eligibility will be based on adjusted gross income in prior tax year (verified via federal income tax data when possible with special procedures for non-filers)

• States may be able to conduct determinations. If so, federal government will reimburse them • Semi-auto enrollment of some people into Medicaid

Strengthening Financing

Finance HELP House• 100% federal financing of new expansions on a temporary basis; phase down to regular FMAP over time

• May include an automatic countercyclical stabilizer in Medicaid

Not addressed in detail due to jurisdictional issues

• 100% federal funding indefinitely for new expansions

• No countercyclical stabilizer

Messaging

For health care reform to be viewed as a success it must ensure everyone has access to quality, reliable coverage – that includes the millions of our children who remain uninsured or do not get the care they need.

Value

Proposals could:• Fall apart entirely;• Risk the stability of the highly-effective Medicaid

and CHIP programs;• Fail to address the red-tape barriers to coverage

that could make it more complicated for parents to enroll their children in coverage; and

• Ignore the unique health care needs of children in efforts to improve the health care delivery system and design benefit packages.

Issues

• Adopt health reform. The country has before it an historical opportunity to provide affordable, high quality-care to everyone and put the nation’s economy on a stronger footing.

• Do no harm. Before making major changes to existing, successful initiatives, Congress should guarantee that children will receive comparable benefits at an affordable price under any new program.

• Insure all kids. Eliminating red tape and bureaucracy by simplifying enrollment would be the cheapest, quickest and smartest next step toward getting most of our children covered.

• Cover Kids from Head to Toe. All children need coverage that meets their unique developmental needs, and provides them with the preventive services, medical care, and oral and mental health benefits needed to launch them on a better trajectory in life.

Ask

There are no do-overs for childhood. Let’s make sure Congress gets health reform right the first time. For health reform to be truly successful, it must ensure that everyone – including all of our children -- have high-quality, affordable coverage.

Vision